Certified Islamic Professional Accountant (CIPA) - Prospectus - Ihdinaa
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Certified Islamic Professional
Accountant (CIPA)
Prospectus
Certified Islamic Professional Accountant (CIPA) Learners become Leaders T he Certified Islamic Professional Accountant (CIPA) qualification is a qualification which is globally recognized and valued as the benchmark in Islamic Finance education. Whether you are starting your career in Islamic finance, already have experience, or are contemplating a change of profession, the CIPA program will equip you with the knowledge, requisite technical understanding and professional skills on accountancy for international Islamic banks and financial institutions. CIPA will give you the confidence you need to develop yourself as a professional Islamic accountant and/or auditor. This prospectus provides the information you need to know about CIPA program. It also includes the registration form that you need to get yourself enrolled for the program. DISCLAIMER The information in this prospectus should be treated merely as an indicative guide. While we endeavour to ensure that the prospectus is accurate and up to date, it is presented without guarantees, conditions, or warranties as to its accuracy and suitability for your purpose. AAOIFI disclaims all liability and responsibility arising from any reliance placed on the information contained in the prospectus. For up to date information please visit our website (www.aaoifi. com) before registration and during the CIPA program. Thank you.
Message from the
Secretary General, AAOIFI
Dr. Hamed Merah
Secretary General
Dear Prospective CIPA Candidates:
السالم عليكم ورحمة اهلل وبركاته
A very warm welcome to the CIPA program!
Enrolment in CIPA program will be an exciting and rewarding
journey as CIPA offers great opportunity for academic and
personal growth.
The CIPA program provides a unique and exceptional
experience dedicated to create employable graduates and
enriched lives.
Our curriculum includes up to date courses that cover skills
and concepts that will be useful at different stages of your
career. However, in order to become CIPA Fellow, you have
to have moral and ethical values such as discipline, integrity,
honesty, cooperation, hard work, tenacity, and patience.
Once you have qualified, you are expected to uphold the
integrity of CIPA certification.
I wish you all the very best as you embark your journey in
CIPA program. AAOIFI is here to assist in your journey all
the way and to see that you make a remarkable difference
when you step out to the real world. I hope the journey you
take during the program will be enriching and fulfiling and
equip you with knowledge and skills and critical attributes
which are useful during and beyond CIPA program time.
May Allah SWT infinitely and unconditionally enrich you
with His blessings and mercy, Amen.
Dr. Hamed Merah
EDUCATION SCHEME 2017
CERTIFIED ISLAMIC
PROFESSIONAL ACCOUNTANT
(CIPA) PROGRAM
EDUCATION SCHEME
1) ABOUT CIPA without any duty or obligation to disclose the reasons
for the same.
(1) Certified Islamic Professional Accountant (CIPA)
is professional program certified by AAOIFI designed 4. CURRICULUM AND SYLLABUS
to equip candidates with the requisite technical
understanding and professional skills on accountancy (1) Any candidate seeking certification under CIPA
for international Islamic banks and financial institutions. program shall be required to pass all the Papers
(2) To qualify for CIPA, candidates must fulfil the forming part of the CIPA Module from time to time or
education and practice requirements (except when obtain exemption(s) therefrom.
exempted in writing by AAOIFI).
(3) This Scheme shall be known as CIPA Education (2) Curriculum
Scheme 2017.
The CIPA study covers four Papers divided into five
2) DEFINITIONS subject as follows:
(i)
(1) In this Scheme, unless there is anything repugnant
in the subject context: Paper 1: Islamic Financial Accounting and
(i) Candidate means a person admitted to the Reporting;
CIPA program; Paper 2: Audit, Assurance and Ethics;
(ii) Examinee means a candidate who appears in Paper 3: Business and Regulatory Environment;
any CIPA examination; Paper 4A: Sharia Standards;
(iii) Website means website of the AAOIFI: Paper 4B: Sharia Governance;
www.aaoifi.com
(2) Words denoting the singular shall include the plural (3) Syllabus
and vice versa and the words that imply masculine
shall include the feminine gender and vice versa. (i) The contents and the learning outcomes of
each subject are detailed in the Syllabus
(ii) The Syllabus primarily comprise of the
materials contained in the study texts
3) REGISTRATION published by AAOIFI. However, AAOIFI
reserves the right to vary the contents,
(1) Registration as a Candidate: include new materials, topics and/
Persons may apply for enrolment as CIPA candidates or standards in the Syllabus as
if they: AAOIFI may deem necessary without
(i) are undergraduates or postgraduates from changing the study texts.
university recognized by competent authority (iii) Where specific reference to any
of higher education in their own countries or legislation, guideline, standard, and other
abroad with minimum 55% pass marks; or similar document is given in the
(ii) member of accounting professional bodies Syllabus, it shall be deemed to
which are IFAC members or have any cover any subsequent amendments
other accounting and finance related that may be made thereto.
professional membership / affiliation (iv) Any subsequent revision in the
recognized by AAOIFI from time to time; Curriculum and/or the Syllabus shall be
(iii) have applied to AAOIFI for registration in communicated through the Updates
CIPA program; and on the Syllabus that will be made
(iv)have paid the Registration Fee. available on the Website.
(2) Registration Fee:
5. EXEMPTION(S)
(i) No application for registration will be
processed unless the Registration Fee has been
(1) Application
paid in full.
Any eligible candidates seeking exemption(s) shall
(ii) The Registration Fee is not refundable.
apply to AAOIFI on the specified exemption form and
pay the prescribed fee.
(3) While in most cases candidates meeting the above
(2) Conditions for eligibility for exemption
requirements will be enrolled in CIPA program upon
Candidates who meet any of the following
receipt of all supporting documents required for
requirements are eligible to apply for exemptions:
registration, AAOIFI reserves the sole and absolute
discretion to refuse enrolment of any candidates
EDUCATION SCHEME
(a) Candidates who hold minimum four years of Module Fees are payable before commencement of any
relevant degree or a postgraduate degree in accounting, study for the respective paper. There are four Papers
commerce, business administration, or economics or under the CIPA module.
holders of accounting professional qualification shall be
eligible to apply for exemptions from: Examination Fees are payable when Candidates register
(i) Audit, Assurance and Ethics; to sit for an examination for any (or all) of the four
(ii) Business and Regulatory Environment Papers under the CIPA module.
provided they fulfill the criteria specified in
this paragraph. Report Assessment, Verification and Certification
Fee is payable when candidates have submitted their
(b) Criteria for exemption shall be as follows: final reports following the completion of the practical
experience. The fee includes the cost for assessment,
(i) The Syllabus content and learning outcomes verification of documents (including the documents
of the holding degree or professional provided for Registration) and certification.
qualification match at least 70% with
that of the relevant CIPA paper, or be of more Fees reduction and Scholarship:
advanced level; and
(ii) A person has secured minimum 60% pass AAOIFI offers some reduction with respect to the
mark or equivalent grades in aggregate in the Module Fees as follows:
subject from which exemption is sought. 1. Up to 50% reduction of the Module Fee(s) (for
Candidates taking the training and/or exam in
In certain cases AAOIFI may decide to grant exemption examination center designated as within developing
to the candidate subject to successful submission of markets)
thesis on an assigned topic within the parameters of the 2. 30% Module Fees reduction for self-study Candidates
Syllabus. 3. 20% module fees reduction for eligible employees of
AAOIFI Members
(3) University Collaboration program: 4. For existing CIPA Candidates, there is no registration
Candidates may also apply for exemption from the fee and 60% reduction of the Module Fees
study and the relevant examination in a particular AAOIFI also offers partial or full scholarship for eligible
subject or subjects if such candidates have taken similar Candidates.
subject(s) from the university with whom AAOIFI has
collaboration program. AAOIFI reserves the right to revise the fee structure at
any time. Please check the Website for up to date fee
6. FEES & REFUND structure.
(1) Fee Structure: (2) Refund
All fees are non refundable.
Registration Fee: US$ 100
(3) Deferral requests
Enrolment Fee: US$ 400 Candidates may apply for Examination deferral for up
Module Fees: US$ 800 per paper to two examination periods, after which the respective
Examination Fee will be forfeited.
US$ 200 per paper (the
Examination Fees:
resit for any examination)
7. EXAMINATIONS
Report Assessment,
Verification & Certification US$ 500
Fee: (1) Admission to examination
Candidates are eligible to sit for the examination if they:
Registration Fee is payable when prospective candidates
submit the properly completed Registration Form. (i) have been successfully enrolled as
Candidates;
Enrolment Fee is payable when application for (ii) have paid the Module Fee for the
registration is successful. This fee includes the cost of respective paper;
four study textbooks which AAOIFI will provide to the
Candidates upon payment of Enrolment Fee.
EDUCATION SCHEME
(iii) have completed the training for the (c) Suspend the admission to examination
respective paper except for self-study for a period deemed appropriate, but not
candidate; exceeding two years; and
(iv) have registered to sit for the examination for (d) Suspend the Enrolment for a period
the respective paper; and deemed appropriate, but not exceeding
(v) have paid the examination fee. two years.
(2) Scope of studies (5) Examination results
(i) The syllabus of each Paper along with (i) The pass marks shall be 70% for each Paper.
indicative grid is provided in the Syllabus (ii) Notification of the results will be posted on
section of this Prospectus. the Website and will be provided through
email.
(ii) All revisions to standards on accounting and (iii) Candidates will be awarded a Certificate
auditing and code of ethics, if any, shall of Completion and full examination
form part of syllabus after six months from Transcript upon successful completion of
the date of publication or notification by the CIPA program.
AAOIFI even if the new provisions will only
become applicable on a later date. (6) Review of answer scripts
(i) An examinee who fails in an examination
3) Time and place of examination may apply to AAOIFI within 30 days from
(i) All examinations shall be held at such the notification of the result, on a specified
time and places as AAOIFI may from time to form, after paying specified fee, for a
time determine. review of answer script;
(ii) The review shall involve:
4) Use of unfair means a) Checking that the marking process
(i) An examinee shall be considered guilty is free from errors and omissions. In no
of using unfair means if his/her actions are circumstances the examinee will have a
likely to give an unfair advantage to right to see his/her answer script; and
him/her or to any other examinee; b) Marks were correctly counted and
reflected in the results of the
(ii) The unfair means may include but are not examinee.
limited to: (iii) The response of the review application
shall be sent to the applicant within 40
(a) Cheating, helping or taking help from days of the receipt of application
others while attempting an examination; by AAOIFI. AAOIFI will not undertake
the review unless the candidate has
(b) Using electronic gadgets, other than those paid the prescribed fee in full.
permitted by AAOIFI, while attending the
examination; (7) Special arrangements
(c) Mentioning name/roll number/any other (i) An examinee may apply to AAOIFI 20
identification mark or signing on days prior to the first day of the month
answer script except on the specified in which examinations are to be held
portion which is specifically provided for for special arrangements required
this purpose; and due to any health or physical condition;
(d) Writing unsolicited remarks on the (ii) The 20 days minimum requirement of prior
answer script. notice may be waived or relaxed by AAOIFI
in case of emergency or under circumstances
(iii) AAOIFI, directly or through its agent(s), beyond the control of the examinee; and
will take appropriate action in the matter, (iii) AAOIFI shall have sole discretion to accept
which may include any of the followings: or reject the application or accept it to the
(a) Cancel the result of the paper in which the extent deemed appropriate duly considering
examinee is found using unfair means; the logistic issues.
(b) Cancel the results of any number of papers
attempted by the examinee in addition to
the paper in which the examinee is found
using unfair means;
EDUCATION SCHEME
8. RULES OF PROGRESSION
(1) Appearance in the Examination
(i) Examinees shall fulfill the administration
requirements including payment of Module
Fee and Examination Fee, as appropriate, on the
prescribed date, to sit for the examination for
the elected Paper.
(ii) Examinees may be permitted to attempt
more than one Paper in one sitting or during
the same examination period subject to meeting
the requirements set out in Section 7(1) above.
(2) Maximum number of attempts
(i) Candidates are allowed to take unlimited
number of examination attempts subject to
payment of retake examination fee.
(ii) Despite the foregoing, all candidates are
required to complete the CIPA education
scheme within three (3) years from the
Enrolment Date. Failing to pass the four CIPA
Papers within such period will subject the
candidates to disqualification from the CIPA
program. Any request for deferment must be
in writing, substantiated by evidence and sent
to AAOIFI not later than sixty (60) calendar
days prior to the lapse of such time limit.
AAOIFI reserves the absolute and sole
discretion whetherto allow the deferment
without any obligation or duty to disclose the
reason for the same.
9. TRANSITION POLICY
Previously enrolled candidates of CIPA are required to
contact the respective examination centers and/or AAOIFI
for the arrangement for transition to the new CIPA
program.
10. EDUCATION DELIVERY
Please check the Website from time to time for the relevant
dates of CIPA Education Delivery and the venues for the
same.PRACTICAL
EXPERIENCE SCHEME 2017
CERTIFIED ISLAMIC
PROFESSIONAL ACCOUNTANT
(CIPA) PROGRAMPRACTICAL EXPERIENCE SCHEME
1. PURPOSE 7. ELIGIBILITY
The purpose of this document is to outline the Practical CIPA candidates must fulfill all of the following
Experience procedures for the Certified Islamic conditions to become eligible for Practical Experience
Professional Accountant (CIPA) program. work:
i. Have passed Paper 1: Financial Accounting and
2. SCOPE Reporting of CIPA module;
ii. Have secured an AAOIFI approved place for Practical
This procedure is applicable to all CIPA candidates Experience purposes;
iii. Undertake training in any approved discipline related
3. AMENDMENT OF PROCEDURE to Islamic Finance; and
iv. Settle all fees and dues owed to AAOIFI.
Please check the AAOIFI website for the most up-to-date
version of the procedures and/or any amendments to 8. DURATION
the procedure.
i. CIPA candidates shall acquire 1 year of practical
4. OBJECTIVES OF PRACTICAL EXPERIENCE experience in Islamic Finance Industry to qualify for
CIPA certification.
i. To give Candidates a high quality work-integrated ii. The duration of practical experience required from
learning and thinking opportunity for competency any CIPA candidates who:
development and experience building; • have 3 years of relevant Islamic industry experience; or
ii. To enhance the Candidates’ ability and skillset • have 5 years of relevant industry experience; or
through application of theoretical knowledge to practical • are member of accounting professional bodies which
situations within an active workplace environment; are IFAC members or have any other accounting and
iii. To develop in Candidates a sense of responsibility, finance related professional membership / affiliation as
a professional attitude, and ethical values to work approved by AAOIFI from time to time.
professionally with integrity; is shortened to six (6) months.
iv. To develop in Candidates clearer idea of employment iii The candidates who met the requirements in 8(ii)
prospects and opportunities as well as a sense of their above may also apply to AAOIFI for exemption if they
future expected roles; and already have either:
v. To fulfill the partial requirements for a full CIPA • six (6) months of practical experience from an approved
qualification towards becoming a CIPA Fellow Practical Experience Institution (PEI); or
• one (1) year of practical experience from an unapproved
5. PRACTICAL EXPERIENCE Practical Experience Institution (PEI).
Practical Experience requirement will develop and 9. VALIDITY PERIOD
enhance knowledge, skills, experience, attitude, and
values required of a professional to excel in future roles. Candidates are required to fulfil the practical
experience within three (3) years after passing Paper
Candidates will be under the supervision of supervisor 1 of CIPA Module. Any candidates who fail to meet
from an approved organization (the Supervisor). The this requirement will be disqualified. Candidates who
Supervisor will train and evaluate the performance of the have valid reason to request for deferment shall write
Candidate. Candidates are to prepare complete report to AAOIFI requesting for such deferment explaining
for submission to AAOIFI at the end of the Practical the situation and providing appropriate evidence
Experience period in order to progress in CIPA program. for AAOIFI consideration. AAOIFI reserves the sole
and absolute discretion in allowing any deferment or
6. DUTIES OF AN EXTERNAL SUPERVISOR rejecting the same without any duty or obligation to
disclose AAOIFI’s reasons for its decision.
The Supervisor should train and evaluate the performance
of the Candidates. It is expected that the Candidates 10. FINAL REPORT
will work under the supervision of the Supervisor from
whom the Candidates are expected to obtain: The CIPA candidates must prepare Practical Experience
i. proper exposure and on-the-job training and experience Report detailing and explaining all the learning
of handling different situations and problems. outcomes, skills, and competencies acquired during the
ii. necessary guidance for the improvement in the areas Practical Experience period while demonstrating how
as identified during assessments. theoretical knowledge was implemented and integrated
into practical work.PRACTICAL EXPERIENCE SCHEME
The length of the Report is to be between 2500 – 3000 must be approved by AAOIFI.
words.
15. Exemption from Practical Experience Requirement
The format of the Final Report will be as follows:
i. detail description of project(s) and/or assignment(s) i. See 8(iii) above
undertaken; ii. AAOIFI’s decision with respect to any application for
ii. specific learning outcomes, competencies and skills exemption is final and not subject to any appeal.
acquired; and iii. AAOIFI reserves the right to amend the conditions
iii. description of experience acquired in applying to apply for exemption. AAOFI will publish the most
theoretical knowledge to practical situation when up to date conditions to apply for the exemption on the
undertaking project(s) and/or assignment(s). Website.
11. Assessment of the Practical Experience 16. Termination from Practical experience
AAOIFI will assess the Practical Experience based on Candidates will be terminated from Practical Experience
the Final Report that shall consist the following: if they have committed any of the following violations:
i. The Practical Experience Report submitted by CIPA • Violation of Professional Code of Conduct and/or any
Candidate; notice of unprofessional behavior and conduct;
ii. The report submitted and any recommendations • Violation of any rules and regulations of the Practical
made by the Supervisor. Experience Institution; and
• Failure to fulfill 90% of total attendance requirement
12. Final Result during the Practical Experience period.
i. A candidate will be assessed based on the Final 17. Right of Appeal
Report;
ii. Practical Experience result will be reported as either Any Candidate who has received notice of termination
“Pass” or “Fail”. may appeal against such decision by submitting their
iii. Based on evaluation of the Final Report, as and grounds of appeal and the evidence supporting the same
when AAOIFI deems appropriate, AAIFO may request to AAOIFI in writing within fourteen (14) days after they
candidates to do any or all of the followings: receive the termination notice.
• resubmit the Report; and /or
• extend the Practical Experience period. Upon receipt of such appeal, AAOIFI shall consider the
matter and undertake the necessary including, when
13. Expenses appropriate, requesting for hearing and/or further
investigation and/or seeking clarification from the
All expenses and expenditures incurred during the concerned institution.
period of Practical Experience will be borne entirely by
the candidates themselves and any fee, commission, or AAOIFI will communicate the decisions on the appeal to
salary paid to them by the firm as part of the services the respective Candidates. All decisions are final and not
rendered will be theirs, subject to laws and regulations subject to appeal.
of the respective country.
14. Placement for Practical Experience
i. A candidate is advised to secure a place for practical
experience before or immediately after successfully pass
the examination for the First Paper of CIPA Module;
ii. The organization selected for Practical ExperienceSYLLABUS 2017
CERTIFIED ISLAMIC
PROFESSIONAL ACCOUNTANT
(CIPA) PROGRAMSYLLABUS
Modules Weightages and Marks
Weightage Marks
Paper 1 Financial Accounting and )33%( 66
Reporting
Paper 2 Audit, Assurance and Ethics )17%( 34
100
Paper 3 Business and Regulatory )17%( 34
Environment
Paper 4A Shari’ah Standards )20%( 40
Paper 4B Shari’ah Governance )13%( 26
100
200
CIPA MODULE
PAPER 1: Financial Accounting and Reporting (66 Marks)
(Weightage 33%)
OBJECTIVE
To develop in-depth understanding and application abilities of the requirements of the AAOFI Financial
Accounting Standards in respect of presentation of financial statements and financial reporting of Islamic
Financial Institutions (IFIs).
LEARNING OUTCOMES
• Develop a solid foundation in the principles and practices of Islamic Finance;
• Understand the accounting concept and framework;
• Demonstrate practical applications of financing contracts;
• Perform accounting for associates and subsidiaries; and
• Understand disclosure requirements in AAOIFI Financial Accounting Standards for IFIs and
their subsidiaries and associates.SYLLABUS
INDICATIVE GRID
Syllabus Contents Areas Weightage (%)
1 Accounting concepts, framework, & general 7
presentation
2 Islamic Financing contracts 46
3 Investments 15
4 Investments Funds 10
5 Institutions Accounting 15
6 Other Standards 7
Total 100
Note: The weightages above are given solely as guidance. There may be some deviations in setting of papers.
GENERAL OUTLINE
1. ACCOUNTING CONCEPTS, B. Salam and Istisna’a
FRAMEWORK, & GENERAL i)Introduction
PRESENTATION ii) Overview and key definitions
iii) Salam
A. Islamic financial system and reporting framework iv) Process flow of Salam
i) Introduction v) Accounting treatment of Salam
ii) The evolution and role of Islamic finance vi) Parallel Salam
iii) Importance of financial reporting framework vii) Presentation and disclosure requirements for
iv) Accounting bodies around the world Salam
v) Obligations of the management to the viii) Some practical aspects relating to Salam
stakeholders of IFIs
vi) Common ground between accounting bodies C. Istisna’a
i) Accounting treatment by IFI as seller
B. Accounting framework and general ii) Accounting treatment of Istisna’a from the
presentation and disclosures perspective of buyer
i) Accounting recognition and measurement iii) Process flow of Istisna’a
ii) Financial statements iv) Presentation and disclosure requirements for
iii) Preparation of financial statements Istisna’a
iv) Disclosure of accounting policies in the financial v) Some practical aspects relating to Istisna’a
statements vi) Key differences with IFRS
v) Detailed disclosures in a complete set of
financial statements D. Ijarah and Ijarah Muntahia Bittamleek
vi) Other disclosures in the financial statements i) Introduction
ii) Ijarah
2. ISLAMIC FINANCING CONTRACTS iii) Global legal systems
iv) Flow of Ijarah transaction
A. Murabaha v) Accounting treatment of operating Ijarah
i) Introduction vi) Accounting treatment for Ijarah Muntahia
ii) Types of Murabaha Bittamleek in the financial statements of IFI as
iii) Measurement principles lessor
iv) Recognition of profits vii) Accounting treatment for Ijarah Muntahia
v) Presentation and disclosure requirements Bittamleek in the financial statements of IFI as
vi) Other practical aspects lessee
vii) Commodity Murabaha (Tawarruq) viii) Sale and lease back transactions
viii) Comparisons with relevant International ix) Presentation and disclosure requirements
Financial Reporting Standard (IFRS) x) Other practical aspects
xi) Key difference with IFRSSYLLABUS
E. Musharaka and Mudaraba B.Investment funds accounting
i) Introduction i) Introduction
ii) Musharaka financing ii) Investment funds
iii) Mudaraba financing iii) Key elements of financial statement of
iv) Difference between Mudaraba and Musharaka investment funds
v) Sale and leaseback transactions iv) Disclosure requirements
vi) Key differences with IFRS v) Other practical aspects
vi) Comparison with IFRS
3. INVESTMENTS 5. INSTITUTIONS ACCOUNTING
A. Investments in real estate A. Islamic insurance
i) Introduction i) Introduction
ii) Investment in real estate ii) Introduction to Takaful
iii) Recognition and measurement – purchased / iii) Key features of Islamic insurance and
constructed property differences with conventional insurance
iv) Recognition and measurement – property under iv) Operating models for Islamic insurance
construction company
v) Transfer of assets v) Financial statements of Islamic insurance
vi) De-recognition companies
vii) Disclosure requirements vi) Contributions in Islamic insurance companies
viii) Key differences with IFRS vii) Qard al-Hasan and related accounting matters
viii) Technical provisions
B. Investments in Associate and Subsidiary ix) Reserves
i) Introduction x) Window operation of Islamic insurance by
ii) Associates and subsidiaries conventional insurer
iii) Investment in subsidiaries – consolidation xi) Presentation and disclosure
process xii) Key differences with IFRS
iv) Investment in associates
v) Presentation and disclosure requirements 6.OTHER STANDARDS
vi) Key differences with IFRS
A.Zakah
C. Investments in Securities i) Introduction
i) Introduction ii) Accounting treatment of Zakah
ii) Investments in securities iii) Determination of Zakah base
iii) Classification iv)Illustration explaining calculation of Zakah
iv) Initial recognition and subsequent measurement v) General ruling of Zakah
v) Presentation and disclosure requirements vi) Presentation and disclosure requirements
vi) Key differences with IFRS vii) Other practical aspects
viii) Conditions for liability to pay Zakah
4. INVESTMENTS FUNDS ix) Illustration explaining calculation of Zakah
A. Investment Accounts B. Other Standards
i) Introduction i) Introduction
ii) Investment accounts ii) Foreign currency transactions and foreign
iii) Equity of unrestricted investment account operations
holder iii) Disclosure on transfer of assets
iv) Equity of restricted investment account holder iv) Segment reporting
v) Reserves v) Islamic financial services offered by conventional
vi) Other practical aspects financial institutions
vii) Inclusions in FAS 27 when compared to FAS 5 vi) Key differences with IFRS
and 6
viii) Disclosure on transfer of assets
ix) Key differences with IFRSSYLLABUS
CIPA MODULE
PAPER 2: Audit, Assurance and Ethics (34 Marks)
(Weightage 17%)
OBJECTIVE
To ensure that students understand the process and techniques of carrying out the audit in accordance with
the principles of accountancy as well as with the International Standards on Auditing
LEARNING OUTCOMES
• Develop strong understanding of the code of ethics for professional accountants and auditors;
• Apply the fundamental principles of accounting and auditing;
• Understand the Audit methodology and processes;
• Understand various Audit findings and impact on audit report; and
• Understand types and structure of audit report.
INDICATIVE GRID
Syllabus Contents Areas Weightage (%)
1 Code of Ethics for professional 15
accountants and auditors
2 Audit Objectives and Principles 11
3 Audit procedures and processess 66
4 Audit conclusion and reporting 8
Total 100
Note: The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected
GENERAL OUTLINE
1. CODE OF ETHICS FOR PROFESSIONAL 2. AUDIT OBJECTIVES AND PRINCIPLES
ACCOUNTANTS AND AUDITORS
A. Code of Ethics for professional accountants and A. Introduction and objectives of an audit
auditors i) Introduction and brief objectives
i) Introduction ii) Importance and impact of an effective audit
ii) Fundamentals of ethics iii) Responsibilities of management and auditor in
iii) Accounting and Auditing Organization for relation to preparation of financial statements
Islamic Financial Institutions (AAOIFI) Code of iv) Audit risk and inherent limitations of audit
Ethics v) Users of financial statements
iv) International Ethics Standards Board for vi) Statutory requirements and regulations
Accountants (IESBA) Code of Ethics vii) International Federation of Accountants (IFAC)
viii) Accounting and Auditing Organization for
Islamic Financial Institutions (AAOIFI)SYLLABUS
B. Internal audit D. Audit evidence
i) What is an internal audit i) Introduction
ii) Need for an internal audit function ii) Analytical procedures and test of details
iii) Functions of an internal audit department iii) Sufficient and appropriate evidence
iv) Difference between external and internal audit iv) Audit sampling
v) Code of ethics for internal auditors v) Audits conducted using information technology
vi) Types of internal audit assignments vi) Audit procedures relating to audits of different
vii) Internal audit report organizations
viii) Limitations of an internal audit function vii) Audit evidence obtained prior to issuing an
ix) Outsourcing of internal audit function audit report
viii) Specific areas of audit
C. Types of assurance
i) Introduction E. Using the work of an expert
ii) Introduction to assurance engagements i) Introduction
iii) Elements of an assurance engagement ii) Importance of involving an expert
iv) Types of assurance engagements iii) Management’s expert
iv) Auditor’s expert
3. AUDIT PROCEDURES AND PROCESSES v) Responsibility of an expert in the overall audit
vi) Specific ethical issues involved in case of
A. Client acceptance and Continuance auditor’s expert
i) Introduction
ii) Tendering and obtaining work F. Other audit services
iii) Client screening and acceptance of new i) Introduction
engagement ii) Assurance engagements
iv) Ethical considerations while accepting an audit iii) Review of financial statements and financial
v) Contact with previous auditor information
vi) Preconditions of an audit iv) Assurance engagements other than audit or
vii) Audit engagement letter review
viii) Fee for professional services v) Other engagements
B. Audit strategy and planning
i) Introduction 4. AUDIT CONCLUSION AND REPORTING
ii) Elements of an audit strategy
iii) Developing an audit plan A. Audit conclusion and reporting
iv) Designing audit procedures i) Introduction and objectives
v) Aligning audit procedures with risk ii) Contents of an audit report
vi) Documentation iii) Types of audit opinion / report
iv) Management letter
C. Risk assessment v) Other regulatory reports
i) Introduction
ii) Components of audit risk
iii) Assessing risks of material misstatement
iv) Understanding the entity and its environment
v) Determining planning materiality
vi) Response to assessed risks
vii) Tests of control
viii) Professional scepticism
ix) Fraud and irregularities
x) DocumentationSYLLABUS
CIPA MODULE
PAPER 3: Business and Regulatory Environment (34 Marks)
(Weightage 17%)
OBJECTIVE
To equip candidates with the understanding of the fundamentals of business and business management
and the role of an accountant in relation to governance, tax, compliance and risk management in an
organization.
LEARNING OUTCOMES
• Explain the nature of Introduction of business and its environment;
• Understanding the different types of business entities and organization structure;
• Understand the various of types of taxes and tax evasion techniques;
• Understand various types of risks in business and its assessment; and
• Understand the capital adequacy and components and calculation of regulatory capital and risk
weighted assets.
INDICATIVE GRID
Syllabus Contents Areas Weightage (%)
1 Introduction to Business 20
2 Business Entities 20
3 Key concepts of common law 5
4 Taxation 5
5 Risks 30
6 Capital Adequacy 20
Total 100
Note: The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected
GENERAL OUTLINE
1. INTRODUCTION TO BUSINESS B. Market forces
i) Introduction
A. Business environment ii) Market
i) Introduction
iii) Demand
ii) Organization in its environment
iii) Macro environment iv) Supply
iv) Micro environment v) Competition dynamics
v) Industry and sector
vi) Porter’s five forces
vii) Government and business relations
viii) Relationships with stakeholders
ix) Shifts in economic balance of powerSYLLABUS
C. Business strategies 3. KEY CONCEPTS OF LAW
i) Introduction
ii) Strategy A. Key concepts of law
iii) Levels of strategy i) Introduction
iv) Value creation ii) Law
v) Elements of strategic management iii) Global legal systems
vi) Diversification iv) Islamic law of contract
vii) Business unit strategy v) Contracts for the international sale of goods
viii) Sustaining competitive advantage vi) The law of employment
ix) Strategy development, implementation and
monitoring 4. TAXATION
D. Marketing A. Introduction to tax
i) Introduction i) Introduction
ii) Evolution of the marketing concept ii) Taxation in a modern economy
iii) Social context of marketing behaviour iii) Different types of taxes
iv) Marketing planning process iv) Tax evasion and tax avoidance
v) Role of branding v) Incidence of tax
vi) E-commerce vi) Potential impact of high taxation
vii) E-marketing vii) Tax free zones
E. Communication within an organization 5. RISKS
i) Introduction
ii) Communication in business A. Introduction to risks within financial
iii) Communication in management institutions
i) Introduction
2. BUSINESS ENTITIES ii) Managing financial institutions in the risk
environment
A. Forms and types of companies iii) Regulations for financial institutions
i) Introduction
ii) Forms of organization B. Credit risk
iii) Company formations i) Introduction
iv) Share and loan capital ii) Credit risk
iii) Credit risk assessment
B. Management and administration of a Company iv) Credit risk portfolio management
i) Introduction v) Credit risk guidelines and regulations
ii) Organizational structure
iii) Organizational culture in business C. Liquidity risk
iv) Committees in business organizations i) Introduction
ii) Assessing liquidity
C. Sources of funding and management iii) Mitigating liquidity risk
i) Introduction iv) Liquidity risk governance
ii) Capital and sources of funding
iii) Working capital needs and funding strategies D. Market risk
iv) Gearing (Leverage) i) Introduction
v) Capital structure theories and practical ii) Market risk
considerations iii) Equity price risk
vi) Finance and strategy iv) Commodity risk
vii) Financial management decisions v) Interest rate risk
viii) Cash flow forecasts vi) Foreign currency risk
ix) Importance of cash flow and working capital
management
x) Working capital ratiosSYLLABUS
E. Operational risk and other types of risk 6. CAPITAL ADEQUACY
i) Introduction
ii) Defining operational risk A. Introduction to Capital adequacy
iii) Operational risks specific to IFIs i) Introduction
iv) Operational risk management ii) Introduction to the Basel frameworks
v) Governance of operational risk iii) Introduction to capital adequacy
vi) Equity investment risk iv) Components and calculation of regulatory capital
vii) Rate of return risk and displaced commercial risk v) Components and calculation of risk weighted assets
vi) Profit sharing investment accounts (PSIA)
vii) Basel III
CIPA MODULE
PAPER 4A: Shari’ah Standards (40 Marks)
(Weightage 20%)
OBJECTIVE
To provide the understanding of the basic foundations for Shari’ah compliance underpinning in Islamic
banking and finance, and to develop strong application abilities of the requirements of the AAOFI Shari’a
standards
LEARNING OUTCOMES
• Understand the basic mechanism of Islamic banking;
• Understand equity-based transactions as an investor;
• Understand the basis of the permissibility of trade-based products and their applications in
Islamic finance transactions;
• Understand the underlying principles of Ijarah; and
• Understand the concept of Takaful (Islamic Insurance).
INDICATIVE GRID
Syllabus Contents Areas Weightage (%)
2 Shari’ah Standards 55
Total 55
Note: The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected
General Outline
A.Shari’ah fundamentals of Islamic finance B. Trade based contracts
i) Introduction i) Introduction
ii) Islamic financial system – setting the context ii) Murabaha to the purchase orderer
iii) Key characteristics of Islamic finance iii) Key characteristics of Islamic finance
iv) Riba iv) Salam and Parallel Salam
v) Gharar v) Istisna’a
vi) Other prohibitions vi) Monetization (Tawarruq)
vii) Islamic law of contracts vii) Possession
viii) Procrastinating debtor
ix) Agency
x) Trading in currenciesSYLLABUS
C. Equity based contracts iv) Introduction to Conventional insurance as risk
i) Introduction mitigation tools
ii) Musharaka v) Sharia views on Conventional Insurance
iii) Diminishing Musharaka vi) Introduction to Takaful as alternate to
iv) Mudaraba conventional insurance
vii) Difference between Takaful and conventional
D. Ijarah and Ijarah Muntahia Bittamleek Insurance
i) Introduction viii) Difference between Takaful and mutual
ii) Ijarah insurance
iii) Sale of leased asset, termination of Ijarah ix) Retakaful or Islamic Reinsurance
contract and transfer of ownership x) Takaful Products
iv) Prohibitions and common mistakes in Ijarah xi) Practice and legal framework in different
v) Sale and leaseback markets
xii) Management and Operational Guidelines
E. Investment Sukuk
i) Introduction G. Common banking services and other solutions
ii) Investment Sukuk i) Introduction
iii) Types of Sukuk ii) Corporate banking
iv) Understand asset-based and asset-backed Sukuk iii) Retail banking
v) How it is different from conventional bonds iv) Conversion of a conventional bank to an Islamic
bank
F. Takaful v) Commodities in organized markets
i) Introduction vi) Stipulations of transaction profit calculations
ii) Discussion on Financial Risk and its mitigation
tools
iii) Shariah Perspective on Risk mitigation
CIPA MODULE
PAPER 4B: Shari’ah Governance (26 Marks)
(Weightage 13%)
OBJECTIVE
To equip candidate with comprehensive understanding of the requirements of Governance in an
organization from Shari’ah perspective.
LEARNING OUTCOMES
• Understand the importance of corporate governance for financial institutions and the
significance of the different components of Shari’ah governance.
• Understand the need for a Shari’ah Supervisory Board and its responsibilities.
• Understand the procedural steps of a Shari’ah review.
• Understand the objectives of internal Shari’ah review.
• Understand the responsibilities and disclosure requirements of IFIs under mandatory conduct.
• Understand a work program of one product and how to test it.
• Understand the responsibilities and disclosure requirements for IFIs under recommended
conduct.SYLLABUS
INDICATIVE GRID
Syllabus Contents Areas Weightage (%)
1 Shari’ah Board – Structure, Objectives, 45
Governance and external assignments
Total 45
Note: The weightages given above are for guidance purposes only and some deviations in setting of papers could be expected
General Outline
A. Corporate and Shari’ah governance D. Independent External Shari’ah Audit
i) Introduction i) Introduction
ii) Introduction to corporate governance ii) Requirements of ISAE
iii) Components of corporate governance iii) Parties to an independent external Shari’ah
iv) Governance principles and mechanisms audit
v) Shari’ah governance framework iv) Objectives and preliminary engagement
activities of an external Shari’ah audit
B. Shari’ah supervisory board v) Execution of external Shari’ah audit procedures
i) Introduction vi) External Shari’ah audit report
ii) Shari’ah Supervisory Board vii) Testing for Compliance with Shari’ah Rules and
iii) Stipulations and ethics of Fatwa in the Principles by an External Auditor
institutional framework
iv) Shari’ah review E. Corporate Social Responsibility and Islamic
v) National / central Shari’ah supervisory board Financial Institutions
vi) Difference between Shari’ah review and internal
Shari’ah audit / review i) Introduction
ii) Corporate social responsibility in Islam
C. Internal Shari’ah Audit / Review iii) The CSR framework
i) Introduction iv) Mandatory conduct
ii) Internal Shari’ah audit / review v) Voluntary conduct
iii) Internal Shari’ah audit / review process vi) Corporate social responsibility report
iv) Execution of internal Shari’ah audit / reviewAbout
The Accounting and Auditing Organization for Islamic
Financial Institutions (AAOIFI)
The Accounting and Auditing Organization for Islamic Financial
Institutions (AAOIFI) is an Islamic international autonomous not-for-
profit corporate body that develops accounting, auditing, governance,
ethics and Shari’ah standards for Islamic financial institutions and the
industry.
Professional qualification programs (notably the Certified Islamic
Professional Accountant (CIPA) and the Certified Shari’ah Adviser and
Auditor (CSAA), and the corporate compliance programs) are also offered
by AAOIFI in its efforts to enhance the industry’s human resource bases
and governance structures.
As an independent international organization, AAOIFI is supported by
a large base of institutional members from around 45 countries, so far,
including the Islamic Development Bank (IDB), central banks, Islamic
financial institutions, and other participants from the international Islamic
banking and finance industry, worldwide.
To-date, 97 standards has been issued by AAOIFI including: (a) 57 on
Shari’ah, (b) 26 on accounting, (c) 5 on auditing, (d) 7 on governance,
and (e) 2 on codes of ethics, in addition to constant review and update of
existing ones.
For more information on the CIPA
program, please visit
CONTACT US www.aaoifi.com.
Office 1001, 10th Floor, Al Nakheel Tower,
Building 1074, Road 3622, Seef District 436,
KINGDOM OF BAHRAIN
Tel: +973 17 244 496
Fax: +973 17 250 194
Email: cipa@aaoifi.comYou can also read
